Will iPhone kill iPod, or touch slow iPhone sales?

Will the iPod slowly become a historical anachronism as consumers move to mobile devices, and will iPod touch cannibalise iPhones sales?

By
Jonny Evans
| 14 Sep 07

Apple is widely expected to reveal its European iPhone launch plans at a special London event on Tuesday morning - but analysts are beginning to mull over the potential effect on sales of the device of Apple's iPod touch.

Analysts are beginning to question the future of the iPod range itself, noting that convergent technologies suggest in future consumers will prefer an all-in-one device.

Diffusion Group analyst Brion Feinberg believes mobile phones will become the de facto choice for media on the go - and reckons iPods will become historical anachronisms.

“Within the next few years, demand for stand-alone portable music players will peak and begin to slowly fade into the background; within ten years, these devices will be relegated to museum shelves next to the vinyl LP and the 8-track player," he said.

Decreasing flash memory costs, higher capacity solid state memory, mobile music services and new partnerships propelled Apple to unleash its iPhone, he said, calling this "the future of the iPod".

Apple may silently already consider iPhone to be the premium future-focused device, as reports emanating from the US claim the screen used in the iPhone-like iPod touch are inferior to those deployed in the phone.

Gizmodo's initial test indicate that the iPod touch screen isn't as faithful to colour reproduction as that of the iPhone. "The iPod Touch's screen turns black areas somewhat greyish, washed out shadow detail, with absolute blacks appearing shimmery," that report claims, citing the publication's own tests along with reader feedback.

Another interesting nugget on the iPod touch has also emerged. EnGadget has the story of one iPod touch which shipped without its OS X-based operating system installed.

Instead of finding the expected collection of application icons when he switched his all-new device on, the owner found a screen populated by diagnostic utilities - and these included a Bluetooth icon showing a disabled radio. EnGadget concludes that the software technology to support Bluetooth therefore exists in the iPod touch, but is unsure if the hardware is installed.

European analysts are considering the significance of the closeness between the two products, though Apple users are praising the iPod touch for offering iPhone like utility without requiring them to select an all-in-one device - or choose to switch networks.

Apple hasn't shot itself in the foot, but it has definitely shot the mobile operators in the foot," says Jean-Philippe Bouchard, a senior research analyst with IDC. "The new iPod will most definitely impact sales of the iPhone.

That analyst told The Telegraph that he believes the iPod touch will take some potential sales away from the iPhone, to the detriment of Apple's exclusive European mobile network partners.

It's widely believed that the device which appears next week for the European market will offer higher memory capacity (16GB, just like the touch) and 3G support. However, it would be unusual for Apple to move to a G2 product so soon after releasing the initial incarnation in the US.